1st Quarter Results - Part 2
Telefonica SA
15 May 2006
Part 2
RESULTS BY BUSINESS LINES
Others Business
DIRECTORIES BUSINESS
During the first quarter of 2006 the TPI Group's revenues increased by 28.6% to
123.2 million euros. The Group's OIBDA amounted to 29.5 million euros, 21.1%
higher than the figure for the same period of 2005. Net income rose by 22.5% to
14.6 million euros. These results are explained by:
• The good performance of Europe, whose advertising revenues rose by 29.4%
to 60.0 million euros, mainly thanks to variations in the publication
calendar of some guides, the good behavior of the editorial business (+4.8%
like for like growth of books published in the period), and the strong
growth of the Internet revenues, improving a 29.6%.
• Telephone traffic revenues rose 62.6% to 21.7 million euros, thanks to the
consolidation of revenues coming from the Italian telephone information
market.
• Total revenues of TPI Peru grow 6.9% in euros (+0.4% in local currency)-
after the publication of the Lima directory.
• The consolidation of Telinver results, contributing with 1.6 million euros
to revenues.
Once again we would like to emphasize that the TPI Group's interim results are
not comparable on a yearly basis and cannot be extrapolated to year-end. This is
mainly due to the higher concentration of directory publications in the second
half of the year and changes in directory publication schedules.
TPI business in Europe contributed 68% of the Group's revenues in the first
quarter 2006, versus the 65% figure in the first quarter 2005. This increase in
revenues' contribution is explained by the strong growth of revenues in Europe,
positively affected by changes in the first quarter publication schedule of five
directories. In terms of OIBDA, it remains in a 64%.
Revenues in Europe rose 35.9% to 84.4 million euros, mostly due to:
• Changes in the calendar of publication for five guides
• Organic growth of 4.8% in paper products
• 29.6% increase of the Internet products
• growth of the telephone traffic associated to the telephone assistance
services, with revenues increasing in a 61.2%. This growth is helped by the
fact that during the first quarter of 2005 the telephone information service
in Italy had not been launched yet.
Latin America made the remaining 32% contribution to total revenues and 36% to
OIBDA, with TPI Peru being the biggest Latin American contributor to revenues in
the region, thanks to the publication of the Lima directory, which is its main
activity throughout the year. During the first quarter, TPI Peru revenues
reached 27.4 million euros, implying a growth of 6.9% in euros (+0.4% in local
currency). OIBDA of this subsidiary grew a 10.7% in euro terms (+4% in local
currency) to 10.7 million euros.
Low activity registered in the Chilean, the Brazilian and Argentinean
subsidiaries because of their guides publishing calendar make their contribution
to Group's results negligible.
In turn, the directories business of the Telefonica Group, which includes the
Argentinean company Telinver in the three months of both 2005 and 2006, an
increase in revenues of 28.0% compared with the first quarter of 2005 to reach
123.2 million euros. OIBDA reached 29.5 million euros, representing a
year-on-year increase of 23.3%.
TPI - PAGINAS AMARILLAS GROUP
CONSOLIDATED INCOME STATEMENT
Unaudited figures (Euros in millions)
January - March
2006 2005 % Chg
Revenues 123.2 95.8 28.6
Internal expenditure capitalized in fixed assets (1) 0.0 0.0 N.S.
Operating expenses (88.5) (67.0) 32.1
Other net operating income (expense) (5.3) (4.5) 18.1
Gain (loss) on sale of fixed assets 0.1 0.0 N.S.
Impairment of goodwill and other assets 0.0 0.0 N.S.
Operating income before D&A (OIBDA) 29.5 24.3 21.1
Depreciation and amortization (6.9) (5.7) 20.8
Operating income (OI) 22.6 18.6 21.2
Profit from associated companies 0.0 (0.1) c.s.
Net financial income (expense) (1.8) (0.6) N.S.
Income before taxes 20.9 18.0 16.0
Income taxes (6.3) (6.1) 3.4
Income from continuing operations 14.6 11.9 22.5
Income (Loss) from discontinued operations 0.0 0,0 n.s.
Minority interest 0.0 0.0 n.s.
Net income 14.6 11.9 22.5
(1) Including work in process.
DIRECTORIES BUSINESS
CONSOLIDATED INCOME STATEMENT
Unaudited figures (Euros in millions)
January - March
2006 2005 % Chg
Revenues 123.2 96.2 28.0
Internal expenditure capitalized in fixed assets 0.0 0.0 N.S.
(1)
Operating expenses (88.5) (67.8) 30.5
Other net operating income (expense) (5.3) (4.5) 17.7
Gain (loss) on sale of fixed assets 0.1 0.0 N.S.
Impairment of goodwill and other assets 0.0 0.0 N.S.
Operating income before D&A (OIBDA) 29.5 23.9 23.3
Depreciation and amortization (6.9) (5.8) 18.5
Operating income (OI) 22.6 18.1 24.8
Profit from associated companies 0.0 (0.1) c.s.
Net financial income (expense) (1.8) (1.3) 38.5
Income before taxes 20.9 16.7 24.6
Income taxes (6.3) (6.1) 3.4
Income from continuing operations 14.6 10.6 36.7
Income (Loss) from discontinued operations 0.0 0.0 N.S.
Minority interest 0.0 0.0 N.S.
Net income 14.6 10.7 36.5
(1) Including work in process.
RESULTS BY BUSINESS LINES
Others Business
ATENTO GROUP
The revenues of the Atento Group continued to grow quite significantly during
the first quarter of 2006. Revenues stood at 255.5 million euros at March 2006,
a year-on-year growth of 43%. The net income of 13.7 million euros was up 75.3%
(5.9 million euros) in relation to the previous year.
All Atento operations increased their revenues during the first three months of
the year except for Atento Puerto Rico, which dropped its volume of activity
slightly in relation to the same period of the previous year. Most notable were
Atento Venezuela with a growth rate of over 166%, Atento Brasil with a growth
rate of 71.4%, Atento Mexico with a growth in revenues of 60.1% and Atento
Colombia that recorded an increase in sales of 57.5%. Atento Brasil, remained
number one in terms of contribution towards revenues, accounting for 38.8% of
the total Atento Group. Revenues of Atento Espana represented 31.5% of turnover.
The total of both operations recorded a 40.8% increase year on year, losing one
percentage point in the relative weight of the total group's revenues to the
growth in other operations, primarily in Mexico, Venezuela and Chile. Atento
Mexico consolidated its position as the third operation in terms of its
contribution to revenues with 9.1%, followed by Atento Chile with 5.9%.
The growth in sales of the Atento Group in 2006 was supported by the moderate
growth in the activities of the Telefonica Group companies and, primarily, by
the solid performance in the market of clients outside the Telefonica Group that
stood at 45.4% of total revenues, 0.6 percentage points up on the same period of
the previous year.
OIBDA of the Atento Group in 2006 amounted to 34.5 million euros, a 53.1%
increase on the 22.6 million euros obtained in the first quarter of 2005. Atento
Brasil represented 43.5% of the total with 15 million euros. Mexico (4.1 million
euros), Spain (4.0 million euros) and Chile (3.5 million euros) are the other
markets with operations contributing to over 10% of the group's total OIBDA.
The pressure to drop prices remains a trend in the telemarketing activity.
Despite this, margins have increased by 0.9 percentage points year on year and
remain steady in relation to the fourth quarter of 2005. Thus, the OIBDA margin
in relation to total sales stood at 13.5%.
In absolute terms, depreciation and amortization remained at very similar
amounts to those of the first quarter of 2005, allowing for an improvement in
the Operating Income of 11.8 million euros to increase from 15.6 to 27.4 million
euros.
The increase in revenues was accompanied by maintained CapEx that amounted to
3.8 million euros in comparison with the 4.1 million euros of the first quarter
of 2005, primarily focusing on Brazil, Mexico, and Peru.
Operating free cash flow (OIBDA - CapEx) improved year on year by 12.6 million
euros to stand at 30.8 million euros, as a result of the increased operating
results and lower investment effort.
At operating level, the Atento Group had 39,468 positions in place at March 31st
2006, 24.1% more than one year ago and concentrated in Brazil (+2,944), Mexico
(+1,047), Venezuela (+784) and Chile (+639). The average number of occupied
position for 2006 was 32,846. Productivity stood at 80%, a 5 percentage points
increase in comparison with the same period of the previous year.
ATENTO GROUP
CONSOLIDATED INCOME STATEMENT
Unaudited figures (Euros in millions)
January - March
2006 2005 % Chg
Revenues 255.5 178.7 43.0
Internal expenditure capitalized in fixed assets (1) 0.0 0.0 N.S.
Operating expenses (221.0) (156.8) 41.0
Other net operating income (expense) 0.0 0,7 (95.3)
Gain (loss) on sale of fixed assets 0.0 0.0 N.S.
Impairment of goodwill and other assets 0.0 0.0 N.S.
Operating income before D&A (OIBDA) 34.5 22.6 53.1
Depreciation and amortization (7.2) (7.0) 2.2
Operating income (OI) 27.4 15.5 76.1
Profit from associated companies 0.0 0.0 N.S.
Net financial income (expense) (5.3) (3.4) 56.6
Income before taxes 22.0 12.1 81.5
Income taxes (7.2) (3.6) 98.0
Income from continuing operations 14.9 8.5 74.5
Income (Loss) from discontinued operations 0.0 0.0 N.S.
Minority interest (1.1) (0.7) 67.0
Net income 13.7 7.8 75.3
(1) Including work in process.
RESULTS BY BUSINESS LINES
Others Business
CONTENT AND MEDIA BUSINESS
The Contents and Media business ended the first quarter of 2006 with a revenues
of 349.0 million euros, 30.9% up on the figure reached in the same period of the
previous year. This increase is due to the progress in results from all lines of
business.
Operating income before depreciation and amortization (OIBDA) in the
January-March 2006 period amounted to 166.7 million euros, compared with the
45.4 million euros obtained in the same period of 2005. This significant growth
in 2006 was primarily due to the revenues from the sale of part of the Sogecable
Capital by the Telefonica Group in the take-over bid launched by the Prisa
Group.
ENDEMOL NV
Progress has been made during the first quarter of 2006 on all elements of
Endemol's strategy: Endemol has enjoyed a very successful first quarter of 2006
within its Core business area. Endemol's top format in terms of turnover, Big
Brother, remains strong, as it was on air in more countries than in the same
period of last year, returning to screens in Italy and Belgium after an absence
in 2005. The success Endemol has enjoyed worldwide with Deal or no Deal during
the first quarter, in particular in the UK and the USA, has resulted in an
increasing appetite for game shows (a core element of Endemol's portfolio),
which Endemol is capitalizing on.
Regarding North America, Extreme Makeover: Home Edition continued to be among
the most popular shows in the US. After being successfully introduced in the US
market in December 2005, Deal or No Deal again had promising ratings for the
second series, which aired on NBC in March. Specific examples of the resurgence
of game shows can be seen in the US were newly created formats Show Me The Money
and For The Rest of Your Life where sold to Fox and ABC respectively and the
rejuvenated version of Endemol's existing format One versus 100 was sold to NBC,
all in the same week.
In the Scripted field, Endemol enjoyed a sound performance with several
continuing and new soap operas and drama series in its main scripted
territories, like the Netherlands, Italy and Spain, but also with initial drama
productions in countries such as Russia and South Africa. In April, Endemol
increased its stake in the Dutch production company NL Film & TV to 51%, which
focuses exclusively on television drama, comedy and feature films.
In line with the Company's continuing search for expansion in New Territories,
the first Asian subsidiary, Endemol India, opened for business at the beginning
of the year and enjoyed a successful start in the first three months. In
addition, Endemol Polska officially kicked off in Poland as a fully independent
production company headed by a newly appointed Managing Director.
In the Digital Media field, the success of formats like Deal or no Deal and Big
Brother is generating substantial revenues on calls and SMSs. Furthermore,
Endemol is exploring new sustainable revenue streams through cooperation with
companies such as KPN in the Netherlands and BT in the UK further exploiting
Endemol's library and developing of new specific content for their IPTV
concepts.
ATCO
The advertising market in Argentina (Capital and Gran Buenos Aires regions) fell
by 2% over the first quarter of the year in relation to that of the previous
year. This decline can be compared with the 6% increase recorded in the same
period of 2005, which reflected the market recovery recorded over 2004 and 2005.
In this favourable market context, Telefe reaffirmed its position as leader,
obtaining 40.6% of the total audience by the end of the first quarter 2006,
representing a three and a half-point increase in accumulated audience on the
same period of the previous year, followed by Canal 13, its main competitor,
with an average share of 25.1%. The market share accumulated by Telefe in the
first quarter of 2006 stood at 41.8%, very similar to that reached in the same
period of 2005 and, once again, followed by Canal 13 with 35.5%.
Hence, ATCO improved its financial results in comparison to the previous year
thanks to both the increased audience obtained by Telefe, enabling it to
increase its advertising sales in the Inland Provinces, and to the international
sale of its own contents, which exceeded that of the same period of the previous
year by over 40%.
CONTENT AND MEDIA BUSINESS
CONSOLIDATED INCOME STATEMENT
Unaudited figures (Euros in millions)
January - March
2006 2005 % Chg
Revenues 349.0 266.5 30,9
Internal expenditure capitalized in fixed assets (1) 0.0 0.0 N.S.
Operating expenses (299.2) (228.9) 30.7
Other net operating income (expense) (25.3) 0.8 c.s.
Gain (loss) on sale of fixed assets 142.3 7.0 N.S.
Impairment of goodwill and other assets 0.0 (0.0) N.S.
Operating income before D&A (OIBDA) 166.7 45.4 N.S.
Depreciation and amortization (6.9) (7.4) (5.7)
Operating income (OI) 159.8 38.1 N.S.
Profit from associated companies (7.5) (8.7) (14.5)
Net financial income (expense) (21.6) 2.9 c.s.
Income before taxes 130.7 32.2 N.S.
Income taxes (0.9) (13.0) (93.1)
Income from continuing operations 129.8 19.2 N.S.
Income (Loss) from discontinued operations 0.0 0.0 N.S.
Minority interest (7.3) (0.3) N.S.
Net income 122.5 18.9 N.S.
(1) Including work in process.
ADDENDA
Companies included in each Financial Statement
Based on what was indicated at the start of this report, the results breakdown
of Telefonica Group are detailed according to the business in which the Group
has a presence. The main differences between this view and the one that would
apply attending to the legal structure, are the following:
• Telefonica O2 Europa Group includes O2 Group results from February 1st
2006, and Cesky Telecom and Telefonica Deutschland results from January 1st
2006. Telefonica Group 69.4% stake in Cesky Telecom is legally dependent
upon Telefonica S.A. In the case of Telefonica Deutschland, the company is a
100% dependent upon Telefonica Data Corp, S.A.
• Telefonica, S.A. directly participates in the share capital of Endemol
Entertainment Holding, N.V., which has been included in Content and Media
Business. The results from the Sogecable S.A. stake have been also assigned
to Content and Media Business, including the portal divestiture that took
place in the first quarter, even though a part of the investment is legally
dependent upon Telefonica, S.A.
• Telefonica Holding Argentina, S.A. holds 6.98% of Atlantida de
Comunicaciones, S.A. (ATCO) which, for those purposes, is considered to be
part of Telefonica de Contenidos, consolidating 100% share capital of ATCO
in the Content and Media Business.
• The participation of Telefonica Group in IPSE 2000 SpA is assigned to the
cellular business, also including the investment legally dependent upon
Telefonica DataCorp, S.A.
• Telefonica de Argentina (TASA), participated by Telefonica Latinoamerica
Group, sold in November 2005 its 100% stake in Telinver, S.A. share capital
to TPI Group. Nevertheless, the results from this company has been assigned
to the directories business through 2005 in line with our vision for the
total Telefonica's directories business.
• Telefonica Data Group (denominated 'Telefonica Empresas'), legally
dependent upon Telefonica S.A., has been segregated and subsequently
integrated into the fixed line activities both in Latin America and Spain
for presentation purposes, and according to geographic criteria.
• Telefonica International Wholesale Services Group (TIWS) financial results
has been assigned to Telefonica Latinoamerica Group, even though is legally
dependent upon Telefonica, S.A. (92.5%) and Telefonica Data Corp (7.5%).
• The activities of Terra Networks Espana S.A., Maptel Networks, S.A.U. and
Azeler Automocion, S.A. have been included in Telefonica de Espana Group. As
of March 31st 2006, Terra Networks Espana is directly held by Telefonica
S.A., while Maptel Networks and Azeler Automocion are directly held by Terra
Networks Asociadas, S.L.
• Latin American companies formerly dependent upon Terra Group have been
legally transferred to Telefonica International, S.A. during the second
quarter of 2005, although the results have been assigned to Telefonica
Latinoamerica Group from the beginning of 2005.
ADDENDA
Key Holdings of the Telefonica Group and its Subsidiaries detailed by business
lines
TELEFONICA GROUP TELEFONICA DE ESPANA GROUP
% Part % Part
Telefonica de Espana 100.00 Telyco 100.00
Telefonica Moviles (1) 92.46 Telefonica Telecomunic. Publicas 100.00
Telefonica Latinoamerica 100.00 Telefonica Soluciones Sectoriales 100.00
TPI Group 59.90 Telefonica Empresas Espana 100.00
Telefonica de Contenidos 100.00 Terra Networks Espana (1) 100.00
Atento Group 91.35 T. Soluciones de Informatica y 100.00
O2 Group (2) 98.35 Comunicaciones de Espana
Cesky Telecom 69.41
(1) Telefonica S.A. owns 100%.
(1) Effective participation: 92.91%. Includes
Telefonica Moviles S.A.' Stock Options Program
('Programa MOS').
(2) Currently 100%.
TELEFONICA LATINOAMERICA GROUP TELEFONICA MOVILES GROUP
% Part % Part
Telesp 87.49 Telefonica Moviles Espana 100.00
Telefonica del Peru (1) 98.19 Brasilcel (1) 50.00
Telefonica de Argentina 98.03 TCP Argentina 100.00
TLD Puerto Rico 98.00 T. Moviles Peru 98.03
Telefonica Chile (2) 44.89 T. Moviles Mexico 100.00
Terra Networks Peru 99.99 TM Chile 100.00
Terra Networks Mexico 99.99 T. Moviles El Salvador 99.04
Terra Networks USA 100.00 T. Moviles Guatemala 100.00
Terra Networks Guatemala 100.00 Telcel (Venezuela) 100.00
Terra Networks Venezuela 100.00 T. Moviles Colombia 100.00
Terra Networks Brasil 100.00 Otecel (Ecuador) 100.00
Terra Networks Argentina 99.99 T. Moviles Panama 99.98
Terra Networks Chile 100.00 T. Moviles Uruguay 100.00
Terra Networks Colombia 99.99 Telefonia Celular Nicaragua 100.00
Telefonica Data Colombia 100.00 Radiocomunicac. Moviles SA (Arg) 100.00
Telefonica Empresas Brasil 93.98 Telefonica Moviles Chile 100.00
Telefonica Data Argentina 97.92 Group 3G (Germany) 57.20
Telefonica Data USA 100.00 IPSE 2000 (Italy) (2) 45.59
T. Intern. Wholesale Serv. (TIWS) (3) 100.00 3G Mobile AG (Switzerland) 100.00
Medi Telecom 32.18
Mobipay Espana 13.36
(1) Telefonica Empresas Peru has been absorbed by Mobipay Internacional 50.00
T.del Peru as of May 1st 2006.
(2) CTC has changed its name. T. Moviles Soluciones y Aplicac. (Chile) 100.00
(1) Telefonica, S.A. owns 92.51% y Telefonica DataCorp Tempos 21 38.50
owns 7.49%.
(1) Joint Venture which fully consolidates Telergipe
Celular, S.A., Telebahia Celular, S.A., Telest Celular,
Telerj Celular, Celular CRT, Global Telecom, Telesp Celular
and TeleCentro Oeste Part., S.A. through participation at
Vivo Participacoes (62.38%).
(2) ditionally, Telefonica Group holds a 4.08% of IPSE 2000
through Telefonica DataCorp.
TPI - PAGINAS AMARILLAS GROUP TELEFONICA O2 EUROPE
% Part % Part
TPI Edita 100.00 O2 UK 100.00
Publiguias (Chile) 100.00 O2 Gemany 100.00
TPI Brasil 100.00 O2 Ireland 100.00
TPI Peru 100.00 Manx 100.00
Teleinver (Argentina) 100.00 Airwave 100.00
11888 Servicios de Consulta Telefonica 100.00 Cesky Telecom 69.41
Services de Renseig. T. (France) 100.00 Eurotel 69.41
Servizio di Consultazione Telefonica, 100.00 Telefonica Deutschland (1) 100.00
S.R.L. (Italy)
(1) Telefonica S.A. owns 100% through Telefonica
DataCorp.
ATENTO GROUP
% Part OTHER PARTICIPACIONS
% Part
Atento Teleservicios Espana, S.A. 100.00
Atento Brasil, S.A. 100.00 Lycos Europe 32.10
Atento Argentina, S.A. 100.00 Sogecable (1) 16.84
Atento de Guatemala, S.A. 100.00 Portugal Telecom (2) 9.84
Atento Mexicana, S.A. de C.V. 100.00 China Netcom Group (3) 5.00
Atento Peru, S.A.C. 99.46 BBVA 1.07
Atento Chile, S.A. 77.60 Amper 6.10
Atento Maroc, S.A. 100.00 Telepizza 4.33
Atento El Salvador. S.A. de C.V. 100.00
(1) Telefonica de Contenidos, S.A. holds 15.71%
andTelefonica, S.A. holds 1.13%.
(2) Telefonica Group's effective participation.
Telefonica Group participation would be 9.96% if we
exclude the minority interests.
(3) Ownership held by Telefonica Latinoamerica
TELEFONICA DE CONTENIDOS GROUP
% Part
Telefe 100.00
Endemol (1) 99.70
Telefonica Servicios de Musica 100.00
Telefonica Servicios Audiovisuales 100.00
Hispasat 13.23
(1) Ownership held by Telefonica S.A. Endemol Holding NV is
the parent company of Endemol Group and owns 75% of Endemol
NV, company quoted in the Amsterdam Stock Exchange.
ADDENDA
Significant Events
• On May 12th, 2006, Telefonica, S.A., paid an interim dividend from 2005
net income of a fix gross amount of 0.25 euros for each Company share
issued, in circulation and carrying entitlement to this dividend.
• On April 28th, 2006, having analyzed the offers received within the
framework for the sale of the equity interest of Telefonica, S.A. in the
capital of Telefonica Publicidad e Informacion, S.A., Telefonica decided to
sign the contract committing to the formulation and acceptance of a Public
Tender Offer with the English telephone directory company Yell Group plc.
The price of the offer submitted by Yell is 8.50 euros per share
(ex-dividend), which entails a total price of 1,838 million euros for
59.905% of the share capital of TPI currently owned by Telefonica. In this
regard, the shareholders acting at the General Shareholders' Meeting of TPI
held in Madrid on 8 April 2006 approved the distribution of a dividend of
0.40 euros per share, which was paid on May 5th 2006.
• On April 13th 2006, the Swiss government informed 3G Mobile AG, the Swiss
subsidiary of Telefonica Moviles, S.A., of its decision to revoke the UMTS
license granted to this company in 2001. Telefonica Moviles plans to appeal
against this ruling at the Swiss Federal Court.
• On April 7th, 2006, Telefonica acquired the ownership of 50% of Colombia
Telecom's shares plus one. Telefonica as the company's strategic partner,
will take over management of the operator. The deal was formalised on April
17th with the signing of an Investment Agreement. The rest of the operator's
share capital will remain in the government's hands. The government will
have a put option on its stake, exercisable until 2022.
In terms of deal price and financing, Telefonica committed to subscribe in
cash to a Colombian pesos 853,577 million capital increase (approximately
368 million dollars) at the end of April to be financed from the Company's
free cash flow.
• On March 31st 2006, Ipse 2000 SpA lodged its appeal against the decision
taken by the Italian government to revoke the UMTS license it had been
granted in 2000.
• On March 30th 2006, Telefonica S.A. treasury stock position was
239,580,268 shares representing 4.868% of its current share capital,
accordingly to the CNMV filing.
• On March 29th, 2006, the Boards of Directors of Telefonica, S.A. and
Telefonica Moviles, S.A. agreed the approval of a Merger Plan regarding the
merger between Telefonica Moviles, S.A. and Telefonica, S.A., resulting in
the extinction, upon dissolution without liquidation of Telefonica Moviles,
S.A., and the en bloc transmission of its net worth to Telefonica, S.A.,
which shall acquire, by universal succession, all rights and obligations of
Telefonica Moviles, S.A. The exchange ratio for the shares of the companies
participating in the merger, determined on the basis of the current value of
the corporate assets of Telefonica Moviles, S.A. and Telefonica, S.A., shall
be (with no supplemental cash compensation) of four (4) shares of
Telefonica, S.A., each having a face value of one euro, for every five (5)
shares of Telefonica Moviles, S.A., each having a face value of fifty cents
of euro.
Additionally, the Merger Plan sets forth the distribution by Telefonica
Moviles, S.A. of an extraordinary dividend against the distributable
reserves for a gross amount of euro 0.085 per share and an interim dividend,
also extraordinary, against the result obtained from January 1 to March 28,
2006 for a gross amount of euro 0.35 per share. The total amount of the
dividends (both of that initially proposed and of the additional dividends
agreed in the framework of the merger) is, therefore, 0.64 euros gross per
share in circulation and will be paid, if approved by the relevant
Shareholders' Meeting, on July 21, 2006, i.e., before the share exchange
deriving from the merger and, therefore, will be collected only by the
shareholders of Telefonica Moviles, S.A.
• On March 29th, 2006, the Board of Directors of Telefonica, S.A accepted
the resignation of Mr. Miguel Horta e Costa from his position on the Board.
ADDENDA
Changes to the Perimeter and Accounting Criteria of Consolidation
In the period January-March of 2006, the main changes have occurred in the
consolidation perimeter were the following
TELEFONICA GROUP
• Once the Bid for the purchase of all the shares in the UK company O2 plc
ended and the procedure began for the mandatory sale of O2 shares according
to the UK Law, by March Telefonica held 98.35% of the shares forming the
capital of this company that, as of 7th March this year, were no longer
listed on the London Stock Exchange. The company has been included in the
consolidation perimeter of the Telefonica Group using the full integration
method.
• Capital increase in the subsidiary company Comet, Compania Espanola de
Tecnologia, S.A. in February this year through an increase in the face value
of the 119,850 existing shares by 1.92 euros to total 0.23 million euros.
Telefonica, S.A., its sole shareholder, subscribed and paid up the entire
capital increase. In March Comet also increased its share capital by
approximately 0.01 million euros with an additional paid-in capital of 1.72
million euros, fully subscribed and paid up by its sole shareholder
Telefonica. The company continues to be included in the consolidation
perimeter of the Telefonica Group using the full integration method.
TELEFONICA DE ESPANA GROUP
• In February, the Spanish company Telefonica Cable, S.A. acquired 15% of
the share capital of Telefonica Cable Galicia, S.A. Through this purchase,
Telefonica Cable became the sole shareholder of the company. The company
continues to be included in the consolidation perimeter of the Telefonica
Group using the full integration method.
TELEFONICA LATIONAMERICA GROUP
• The Brazilian company Santo Genovese Participacoes Ltda., a holding
company that owned all of the capital stock of the Brazilian Atrium
Telecomunicacoes Ltda., was liquidated during the first quarter of 2006
after taking over its subsidiary Atrium. Both companies, which were included
in the consolidated accounts of the Telefonica Group using the full
integration method, have been removed from the consolidation perimeter.
TELEFONICA MOVILES GROUP
• On the 22nd of February 2006, the Shareholders' Meetings of Telesp Celular
Participacoes S.A. ('TCP'), Tele Centro Oeste Celular Participacoes S.A.,
('TCO'), Tele Sudeste Celular Participacoes S.A. ('TSD'), Tele Leste Celular
Participacoes, S.A. ('TBE') and Celular CRT Participacoes S.A. ('CRTPart')
approved corporate restructuring in order to exchange TCO shares for TCP
shares to become a wholly-owned TCP subsidiary and the take-over of TSD, TBE
and CRT Part by TCP.
TELEFONICA CONTENIDOS GROUP
• In March, Prisa launched a partial take-over bid for the 20% of Sogecable,
S.A. The Telefonica Group sold shares representative of 6.57% of the
company's share capital, reducing its stake from 23.83% to 17.26%. Later in
March, Sogecable made a capital increase although without Telefonica Group
taking part, thus diluting its stake in the company's share capital to the
present 16.84%. Telefonica Group continues consolidating Sogecable into the
financial statements by the equity method.
• Andalucia Digital Multimedia, S.A. made a capital increase with the
participation of Telefonica de Contenidos, S.A., which subscribed enough
shares to enable it to increase its shareholding to 24.20%. The company
continues to be included in the consolidation perimeter of the Telefonica
Group using the full integration method.
DISCLAIMER
This document contains statements that constitute forward looking statements in
its general meaning and within the meaning of the Private Securities Litigation
Reform Act of 1995. These statements appear in a number of places in this
document and include statements regarding the intent, belief or current
expectations of the customer base, estimates regarding future growth in the
different business lines and the global business, market share, financial
results and other aspects of the activity and situation relating to the Company.
The forward-looking statements in this document can be identified, in some
instances, by the use of words such as 'expects', 'anticipates', 'intends',
'believes', and similar language or the negative thereof or by forward-looking
nature of discussions of strategy, plans or intentions.
Such forward-looking statements are not guarantees of future performance and
involve risks and uncertainties, and other important factors that could cause
actual developments or results to differ materially from those expressed in our
forward looking statements.
Analysts and investors are cautioned not to place undue reliance on those
forward looking statements which speak only as of the date of this presentation.
Telefonica undertakes no obligation to release publicly the results of any
revisions to these forward looking statements which may be made to reflect
events and circumstances after the date of this presentation, including, without
limitation, changes in Telefonica's business or acquisition strategy or to
reflect the occurrence of unanticipated events. Analysts and investors are
encouraged to consult the Company's Annual Report as well as periodic filings
filed with the relevant Securities Markets Regulators, and in particular with
the Spanish Market Regulator.
The financial information contained in this document has been prepared under
International Financial Reporting Standards (IFRS). This financial information
is unaudited and, therefore, is subject to potential future modifications.
For additional information, please
contact.
Investor Relations
Gran Via, 28 - 28013 Madrid (Spain)
Phone number:
+34 91 584 4700
Fax number:
+34 91 531 9975
Email address:
Ezequiel Nieto -
ezequiel.nieto@telefonica.es
Diego Maus - dmaus@telefonica.es
Dolores Garcia - dgarcia@telefonica.es
Isabel Beltran - i.beltran@telefonica.es
ir@telefonica.es
www.telefonica.es/accionistaseinversores
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The company news service from the London Stock Exchange
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